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Did I end up paying too much for life insurance?

From browsing online reviews and consulting consumer comparison websites to reading company literature and talking with family and friends, everyone likes to think that they are in the best possible position when they go to purchase that new car, television or other big-ticket item.

While it’s true that it can pay real dividends to be a savvy shopper, the reality is that we sometimes end up paying more money for more than we were planning on despite these valiant efforts. Those in need of convincing needn’t look any further than the high performance tires on their family sedan, the professional-grade mixer in their kitchen or even the extra cheese on the pizza they just ordered.

This practice of getting consumers to purchase more than they intended, known as “upselling,” is certainly nothing new and nothing about which consumers should be embarrassed.

Indeed, people should realize that upselling isn’t just confined to the consumer realm, but rather can carry over to other to areas that, while perhaps less exciting, are incredibly important, including life insurance.

The simple reality is that insurance agents make money on commissions and, as such, there are some — but certainly not all — who will attempt to steer people toward purchasing more coverage than is perhaps necessary.

What are some examples of how an agent may attempt to upsell you on life insurance?

Sale of policies longer than necessary

When it comes to term life insurance, you are essentially covered for the timeframe set forth in the policy, typically 10, 20 or 30 years. As such, if you have a 10-year term life policy and pass away on the first day of year 11, there will be no lump sum payout to a beneficiary.

The longer a policy is, the more it typically costs. As such, experts indicate that it’s not uncommon for insurance agents to put these types of policies front and center during initial discussions.

In order to avoid this pitfall, experts suggest would-be buyers take the time to map out their financial plan ahead of time — How much would the kids need through college? How much would my spouse need before becoming financially independent? — and using this as a guide in determining how long the policy would need to be.